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Report: Economic growth being held back by a lack of workers, poor enforcement of workers’ rights and disorganised political leadership

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The Government must move to create a single workers’ rights watchdog to address weak enforcement that is leaving workers vulnerable to “unscrupulous” employers, a report by the cross-party Business, Energy and Industrial Strategy Committee has concluded.

Following high profile committee hearings with British Gas, P&O Ferries and Amazon, this latest report, published today found enforcement to be under-resourced and fragmented across a number of small agencies. Evidence to the inquiry said that the UK had less than half the number of labour inspectors needed to reach international benchmarks and that a company can expect to be inspected by the National Minimum Wage team on average once every 500 years. MPs also heard that many workers do not know what their rights are.

Chair’s comments

Committee Chair Darren Jones said,

“Weak or absent enforcement means workers can be exposed to exploitative practices without any consequence, rendering their rights worthless. Regulatory bodies are doing the best they can with what they have but the Government really must get a move on and create the single enforcement body promised back in 2019. A one stop shop for workers and businesses would provide the clarity, security and effective oversight that is needed.”

Night-time working

One of the areas that MPs highlighted needed shoring up was protections for night-time workers from the damaging effects of night-time work that include increased risk of serious physical and mental health conditions. The Committee also heard divorce rates among night workers and lack of sleep alone costs the economy £50bn per year.

However, when questioned by the Committee, Ministers seemed unaware of these harms.

The Government must launch an investigation into the health and safety implications of night working, the report says.

Shrinking UK labour market is restricting economic growth

Current labour shortages are exacerbated by the ‘exodus’ of over-50s from the labour market over the pandemic. A poll commissioned by the Committee for the inquiry found that although many of them took early retirement, others would return to work if suitably flexible roles with adequate protections allowed them to continue a semi-retirement or caring responsibilities. The lack of protections around flexible working compared with full or part-time work acts as a barrier to those wanting to go back to work.

The report concluded that Ministerial ownership of labour policy was fragmented across many departments and called for the Government to consider either setting up a new Ministry for Labour, appointing a new Minister for Labour in the Cabinet Office or establishing a new Cabinet Committee to coordinate labour market policy across Whitehall.

Mr Jones said,

“Our shrinking and aging UK labour market, and the lack of political leadership of this issue, is holding back economic growth. What we have now is outdated and static while working practices move on.

Rethinking the legal framework and protections around new types of more flexible working through an Employment Bill would open up work opportunities to many people who want to be economically active but currently aren’t. We won’t be able to move the dial on economic growth in our country until we invest in, support and make the most of the potential of every worker across the UK.”

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